No Loan for Stamp Duty : Only Short Term Impact..! - Mr. Om Ahuja
The Reserve Bank of India's (RBI's) move to exclude stamp duty and registration from assessing property value has only had minimal impact.
Short Term Impact..!
According to the RBI's latest notification, stamp duty, registration and other charges are to be excluded when calculating the value of a property. This is expected to have a short term impact and is unlikely to turn out to be a shows topper.
Evidently, the RBI is attempting to introduce an additional element of caution in ensuring that end users & investors do not over leverage in the property purchase process. Land costs are a big problem, since they have shot up considerably. This is pertinent, since land forms 70% to 80% of the total cost of a property in cities.
In comparison, the mortgage is minimal and can be borne with greater ease than increased property rates.
In a short while, the RBI's move may lead to a slight reduction in house sales.
However, buyers will reconcile in the medium to long term. Finally, the added expense is still an investment into a high-value asset, and the husing loan burden reduces proportionately.
Double Tax Deduction Limit..!
With respect to the Finance Ministry's proposal to double the tax deduction limit on the interest on home loans to Rs. 3 lakh per annum, this is indeed a welcome step. However, it is a fact that house sales have already slowed down in India due to the price rise. .
Unless there are clear policy changes, especially in terms of making land available to developers at reasonable prices, the benefits will not percolate down to the common man.
Today, the combined incomes of couples may have gone up, but the same cannot be said about the affordability of homes.
The earlier benchmark of a 5 year joint annual income that will equal the value of an apartment certainly does not hold true any longer.
About the Author..Mr. Om Ahuja, CEO – Residential Services, Jones Lang LaSalle India
The Reserve Bank of India's (RBI's) move to exclude stamp duty and registration from assessing property value has only had minimal impact.
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| Mr. Om Ahuja |
Short Term Impact..!
According to the RBI's latest notification, stamp duty, registration and other charges are to be excluded when calculating the value of a property. This is expected to have a short term impact and is unlikely to turn out to be a shows topper.
Evidently, the RBI is attempting to introduce an additional element of caution in ensuring that end users & investors do not over leverage in the property purchase process. Land costs are a big problem, since they have shot up considerably. This is pertinent, since land forms 70% to 80% of the total cost of a property in cities.
In comparison, the mortgage is minimal and can be borne with greater ease than increased property rates.
In a short while, the RBI's move may lead to a slight reduction in house sales.
However, buyers will reconcile in the medium to long term. Finally, the added expense is still an investment into a high-value asset, and the husing loan burden reduces proportionately.
Double Tax Deduction Limit..!
With respect to the Finance Ministry's proposal to double the tax deduction limit on the interest on home loans to Rs. 3 lakh per annum, this is indeed a welcome step. However, it is a fact that house sales have already slowed down in India due to the price rise. .
Unless there are clear policy changes, especially in terms of making land available to developers at reasonable prices, the benefits will not percolate down to the common man.
Today, the combined incomes of couples may have gone up, but the same cannot be said about the affordability of homes.
The earlier benchmark of a 5 year joint annual income that will equal the value of an apartment certainly does not hold true any longer.
About the Author..Mr. Om Ahuja, CEO – Residential Services, Jones Lang LaSalle India
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